Turkish soda ash producer Eti Soda is a confident company.
Despite lagging its own internal schedules and construction
deadlines in recent years, Eti Soda, which is jointly owned by
Ciner Group and Eti Mining Corp., now says that the business is
Construction at the greenfield Kazan Soda project, which is
being operated under the name Kazan Soda Elektrik, another
Ciner Group enterprise, has now started. Infrastructure,
including water, electricity and rail links were installed at
the site in January 2015 and the development schedule is fixed,
explains Tanzer Ergul, general manager of Eti Soda.
The project is on course to achieve phase one capacity
– 1.5m tpa, across three production lines –
in the second half of 2017. Phase two, which will add a further
1m tpa soda ash capacity across two production lines, is
expected to come online in H1 2018.
The Kazan project has been in the pipeline for some time,
with delays raising questions over its future. According to
Ergul, the reasons for the project being pushed pushed back a
handful of times
over the last two years were holdups in obtaining the
necessary financing and construction permits.
"A delay [to the current project timeline] is not expected,
due to the ongoing construction schedule," Ergul says. "But it
is an extreme project and every detail, like infrastructure,
construction schedule and delivery of the main processing
equipment, may have some effect on the overall schedule."
Like Kazan, Eti Soda’s Beypazari project was
delayed for financial reasons. Construction of the facility
began in October 2014 using the Chinese contractor, China
Tianchen Engineering Corp. (TCC), on an engineering,
procurement and construction (EPC) basis, with start-up
targeted for early 2017. Once operational,
Beypazari’s initial capacity will be 500,000 tpa
soda ash and 100,000 tpa sodium bicarbonate. Final capacity
will be 1.5m tpa soda ash across three production lines,
200,000 tpa sodium bicarbonate across two production lines.
When both sites are completed, the total combined capacity
of Kazan and Beypazari will be 4m tpa soda ash and 400,000 tpa
sodium bicarbonate. This will make Ciner Group, which controls
74% of Eti Soda and 100% of Kazan Soda, the third or fourth
largest soda ash producer in the world – depending on
expansions that take place elsewhere in the meantime.
Upsetting the supply balance?
In order to successfully introduce an additional 3m tpa soda
ash to the global market within two years, Ciner Group needs to
establish a position for this material. This will be difficult
at first, says Ergul, but company is confident extra capacity
can be absorbed from 2017.
"Absorbing the additional production into the market within
a couple of years seems reasonable. There is no other
considerable capacity addition [planned] in the soda ash
industry, excluding China, although the expansion of the market
is dependent on regional growth rates," he says. "Also, there
are some plant closures [scheduled], because of environmental,
technical or cost reasons."
Owing to the US tradition of reporting soda ash production
in short tons (s.tons), rather than metric tonnes, Ergul
explains there is some confusion about Eti Soda’s
position in the market relative to US producers, like
"Market statistics show production rates in tons. The North
American system uses s.tons, which equate to around 90% of the
metric tonnes used in the European system. So there is some
imbalance in the comparison. Another uncertainty is whether
sodium bicarbonate capacities are included in the production
figures or not."
Eti Soda is in its sixth year of operations and sales at
Beypazari and has established a solid reputation with its
customers. The company is a low-cost producer and although its
main customer base lies in Western Europe, it has the
logistical advantage of being able to export easily to South
America and Asia.
"Eti soda produces natural soda ash from trona ore, via
in-situ solution mining. These two parameters – raw
material and mining technique – give a comparable
advantage over synthetic soda ash producers and soda ash miners
that use traditional mining methods," Ergul says.
"The logistics advantages of Eti Soda will be the same for
Kazan, in terms of distance to ports and the sea transport
Ergul says that Eti Soda is happy with its market position
and "very confident" in its product quality, but adds that the
company would like to establish a presence in other markets
with small quantities of material.
One of the reasons customers want to work with Eti Soda is
because of its low emissions status, compared to competitors,
according to Ergul. Natural soda ash production creates only
half of the emissions of synthetic soda ash manufacturing
– an energy intensive process using salt and limestone
as raw materials. This means that customers end up with lower
overall emissions for their products, Ergul explains.
Soda ash prices
Soda ash prices have been strong so far
this year, although the prospect of overcapacity in China has
cast some doubt over whether this can continue in the
to longer term.
However, Ergul is not concerned. "We do not foresee any
price fluctuation in the medium or long term after Ciner Group
puts more product into the market, due to regional market
growth rates [compared to] production capacities," he
He also notes that soda ash prices tend to follow energy
prices. "Energy costs are around half of soda ash production
costs. That is why it will remain the same, as oil prices
influence soda ash prices."